WEBVTT - Nvidia Gains and Chinese Tech Stocks Sink 0:00:01.280 --> 0:00:05.920 From Marhart where Innovation, money and power Collie in Silicon 0:00:06.000 --> 0:00:10.440 Vallet NBN. This is Bloomberg Technology with Caroline Hyde and 0:00:10.680 --> 0:00:11.760 Ed Ludlow. 0:00:25.480 --> 0:00:26.920 Live from New York and San Francisco. 0:00:27.120 --> 0:00:30.960 This is Bloomberg Technology coming up and Vidio needs benchmarks 0:00:31.000 --> 0:00:33.559 in a big week for markets as investors, a weight 0:00:33.640 --> 0:00:36.440 economic data and a fed Pal speech. 0:00:36.360 --> 0:00:37.280 Out of Jackson Hole. 0:00:38.440 --> 0:00:42.000 Chinese tech stock sink overnight the latest and why Walmart's 0:00:42.080 --> 0:00:45.120 three point six billion dollar JD dot com steak sale 0:00:45.440 --> 0:00:48.600 has put e commerce companies under pressure, and Ford pulls. 0:00:48.320 --> 0:00:51.040 Back further from vs scrapping an all electric suv and 0:00:51.080 --> 0:00:55.360 taking a one point nine billion dollar charge to shift strategies. Again, 0:00:55.920 --> 0:00:58.160 that's all to come a first as checking on these markets. 0:00:58.400 --> 0:01:00.800 Some economic data that we are currently digesting is their 0:01:00.800 --> 0:01:04.160 revisions to the jobs data. And yes they're more than 0:01:04.160 --> 0:01:06.840 eight hundred thousand, but not enough to really change the 0:01:06.920 --> 0:01:09.200 dynamic move of the markets right now. Are still holding 0:01:09.200 --> 0:01:11.039 onto our gains up a tenth of a percent, yes, 0:01:11.080 --> 0:01:13.440 and come off the highs, but still managing to cling 0:01:13.520 --> 0:01:15.440 on to an upcycle when it comes to the technology 0:01:15.520 --> 0:01:18.040 name stock six hundred over in Europe, also powering ahead, 0:01:18.200 --> 0:01:21.880 Rock six tens percent. Interestingly, a rebound in Chinese tech 0:01:22.000 --> 0:01:23.800 names as well. I shine a light on the Nasdak 0:01:23.840 --> 0:01:25.679 Golden Dragon, which I know you're going to dig into 0:01:25.680 --> 0:01:28.480 some individual moves of ED, but yesterday under pressure, today's 0:01:28.480 --> 0:01:30.680 still some individual names we're going to be shining a 0:01:30.760 --> 0:01:32.880 light on and just take talk us through what you're 0:01:32.920 --> 0:01:33.360 watching ED. 0:01:34.080 --> 0:01:36.880 Yeah, I mean overnight, a lot of pressure on Hong 0:01:37.000 --> 0:01:41.000 Kong listed tech shares. Why Walmart made three point six 0:01:41.040 --> 0:01:44.720 billion dollars selling out of its stake in JD dot 0:01:44.760 --> 0:01:47.960 Com actually JD confirming through the Hong Kong Exchange that 0:01:48.000 --> 0:01:49.240 wal might no longer hold a steak. 0:01:49.320 --> 0:01:50.040 We're going to hit that. 0:01:50.040 --> 0:01:53.720 Story hard throughout the hour with our reporters who are 0:01:53.760 --> 0:01:55.840 on it. But it's interesting to see, at least with 0:01:55.920 --> 0:02:00.200 JD dot COM's ADRs. The pressure in videos top of mind. 0:02:00.000 --> 0:02:02.240 And again we're at like one hundred and twenty nine 0:02:02.280 --> 0:02:04.320 dollars a share, one hundred and twenty seven dollars a share, 0:02:04.400 --> 0:02:06.320 not far off that one hundred and thirty five dollars 0:02:06.360 --> 0:02:08.720 a share record we hit in June. There is a 0:02:08.720 --> 0:02:12.360 lot of anticipation ahead of next week's earnings. August twenty 0:02:12.400 --> 0:02:15.239 eight far after market in whether in video will get 0:02:15.280 --> 0:02:18.560 back to that record level record heights led the market 0:02:18.639 --> 0:02:21.720 right in this rebound we've seen since August or the 0:02:21.720 --> 0:02:24.920 beginning of August, there's a lot of hope where the 0:02:24.960 --> 0:02:26.760 hope translates to confidence. 0:02:26.760 --> 0:02:29.160 Who knows, Carol, Yeah, and let's dig in to one 0:02:29.160 --> 0:02:31.040 of the key stories being written on the terminal today 0:02:31.080 --> 0:02:33.720 by our own round Lostellica joining us to already pass 0:02:33.800 --> 0:02:36.960 through what the market sentiment is around in video whether 0:02:37.000 --> 0:02:40.480 it can bring this macro level event come August the 0:02:40.520 --> 0:02:41.200 twenty eighth. 0:02:41.320 --> 0:02:43.000 And you talked to some key balls. 0:02:42.720 --> 0:02:46.040 Out there, Yes, good morning, thanks for having me. So 0:02:46.080 --> 0:02:48.679 it does seem like there is growing confidence that the 0:02:48.760 --> 0:02:51.720 spending on AI, which has been really the central ball 0:02:51.840 --> 0:02:55.040 thesis behind in video and really a major driver behind 0:02:55.240 --> 0:02:58.519 overall tech games. People are pretty confident that spending is 0:02:58.560 --> 0:03:01.680 going to remain pretty consistent. There were some concerns earlier 0:03:01.720 --> 0:03:05.320 this month about how much ROI are these companies seeing 0:03:05.320 --> 0:03:05.840 out of their. 0:03:05.720 --> 0:03:07.040 AI investments so far. 0:03:07.520 --> 0:03:10.400 The general thesis seems to be that even if the 0:03:10.520 --> 0:03:12.680 ROI is a little bit delayed and it doesn't start 0:03:12.680 --> 0:03:16.200 showing up in growth and improved efficiency for maybe a 0:03:16.200 --> 0:03:19.400 few more quarters or even longer than that. There's still 0:03:19.400 --> 0:03:21.320 going to be a ton of demand for these AI 0:03:21.480 --> 0:03:24.720 chips and hardware and infrastructure, and that kind of tail 0:03:24.760 --> 0:03:27.920 one is going to continue supporting Nvidia at least in 0:03:27.960 --> 0:03:28.760 terms of its growth. 0:03:29.880 --> 0:03:30.040 Right. 0:03:30.080 --> 0:03:31.000 It's what for counting. 0:03:31.120 --> 0:03:33.960 What's happened just in the last couple of weeks sold 0:03:33.960 --> 0:03:37.240 me through the rally, the rebound in Nvidia shares. 0:03:37.920 --> 0:03:38.119 Yeah. 0:03:38.160 --> 0:03:38.840 Absolutely so. 0:03:38.880 --> 0:03:41.680 We did see some pretty broad based weakness earlier in 0:03:41.680 --> 0:03:44.120 this month. Some of that was related to the end 0:03:44.120 --> 0:03:46.240 and just something else, you know, just other factors like that, 0:03:46.400 --> 0:03:48.680 some concerns about valuation, but we did see a pretty 0:03:49.040 --> 0:03:53.080 dramatic rebound. We also had the megacap results that we 0:03:53.120 --> 0:03:59.880 saw out last month. All the major Nvidia customers like Microsoft, Amazon, Alphabet, Metay, 0:04:00.000 --> 0:04:01.640 we know, really kind of reagread. 0:04:01.240 --> 0:04:02.800 That they're going to continue spending on this. 0:04:02.880 --> 0:04:05.160 And I think those two things just people looking for 0:04:05.200 --> 0:04:08.200 a dip to buy and then that sort of spending tailwind. 0:04:08.480 --> 0:04:11.000 The confluence of those two things really, you know, spurred 0:04:11.000 --> 0:04:13.360 investors to buy the dip on in video and you've 0:04:13.360 --> 0:04:15.360 seen the stock just jump up I think about thirty 0:04:15.400 --> 0:04:17.440 percent or so off that low earlier this month. 0:04:18.279 --> 0:04:23.239 It's interesting that chip makers have been what of dictated where. 0:04:23.040 --> 0:04:25.400 The nazag one hunter is gone and broad on. 0:04:25.560 --> 0:04:27.640 Many on this show call it sort of the poor 0:04:27.680 --> 0:04:30.120 man's in video, and people have been buying into that name. 0:04:30.200 --> 0:04:33.000 I'm looking at Texas Instruments today and actually here's a 0:04:33.000 --> 0:04:36.440 company that's curtailing some of its capital expenditure, which people 0:04:36.480 --> 0:04:39.000 are worrying about too much of in the hyperscaler's area. 0:04:39.040 --> 0:04:41.880 What do you make of TI today, Yeah. 0:04:41.640 --> 0:04:43.640 So they are kind of maybe pulling back in their capex. 0:04:43.720 --> 0:04:45.760 There's some optimism that that's going to lead to some 0:04:45.839 --> 0:04:47.960 improved free cash flow for them. So a little bit 0:04:47.960 --> 0:04:50.080 of a different kind of player. They're not as active 0:04:50.080 --> 0:04:52.119 in AI, certainly not to the extent that in video 0:04:52.240 --> 0:04:54.200 or AMD or some of these other major players are, 0:04:54.440 --> 0:04:56.120 but it does seem like people are looking to them 0:04:56.120 --> 0:04:57.800 just as a way to improve their free cash flow. 0:04:57.839 --> 0:04:59.040 And that's why we're seeing a little bit of a 0:04:59.080 --> 0:05:01.360 lift in that stock today. And we saw that city 0:05:01.440 --> 0:05:03.720 upgrade of the stock kind of expecting improvement in margins, 0:05:03.720 --> 0:05:06.440 improvement in cash flow, all related to its capex comments 0:05:07.000 --> 0:05:07.599 Ran it's. 0:05:07.480 --> 0:05:09.960 A great story on Nvidia talking to so many money 0:05:09.960 --> 0:05:12.719 managers on both sides, and indeed, the LATESTU on Texas Instruments, 0:05:12.760 --> 0:05:15.200 we thank you Ron for SELICA. Now let's dig more 0:05:15.200 --> 0:05:17.320 into some of the individual names and indeed the broader 0:05:17.360 --> 0:05:20.200 market with Kevin Welkosh. He's the portfolio manager of it 0:05:20.279 --> 0:05:22.760 GENS and Investment Management covering tech, AI and chips, who 0:05:22.800 --> 0:05:24.320 are the perfect sort of person that we need to 0:05:24.320 --> 0:05:27.520 speak to when many are wondering what the return on 0:05:27.720 --> 0:05:32.000 investment of AI is for you? Is infrastructure picks and 0:05:32.000 --> 0:05:34.640 shovels still the good place to be allocating. 0:05:35.480 --> 0:05:39.200 Right when we think about it. So what with GENS 0:05:39.240 --> 0:05:42.320 in investment management, we're focused on quality investing, We're focused 0:05:42.320 --> 0:05:44.599 on a long term we think right now sort of 0:05:44.600 --> 0:05:47.159 the AI attention certainly is more in the short term 0:05:47.200 --> 0:05:50.920 in terms of CAPEX band and demand for Nvidia chips, 0:05:52.000 --> 0:05:55.640 but historically that the chip industry is very cyclical and 0:05:55.680 --> 0:05:58.599 we're looking for sort of those platform players that can 0:05:58.680 --> 0:06:02.240 kind of continue to monetize consistently over the long term. 0:06:02.320 --> 0:06:05.600 So when we think about today, certainly the intensions on Nvidia, 0:06:06.520 --> 0:06:08.680 but we're really looking more towards the long term, So 0:06:08.720 --> 0:06:12.160 that would be the Microsoft's really establishing themselves with that 0:06:12.200 --> 0:06:16.120 massive CAPEC spend. We're also seeing it on alphabet side, 0:06:16.440 --> 0:06:19.440 the alphabet side where you know, again that investment's building 0:06:19.440 --> 0:06:21.400 that beachhead for long term monetization. 0:06:22.560 --> 0:06:23.600 We also like Accentrire. 0:06:23.720 --> 0:06:25.960 We think Accenture from an AI story has sort of 0:06:25.960 --> 0:06:28.960 been really misunderstood by the market in our opinion. When 0:06:28.960 --> 0:06:31.920 we look at Accenture right now, we think the mart 0:06:32.040 --> 0:06:34.120 the market, which we continue to think as a long 0:06:34.200 --> 0:06:35.800 term investor, we tend to think of it as very 0:06:35.800 --> 0:06:38.359 short term focused, tends to focus on a little bit 0:06:38.360 --> 0:06:40.760 of slowdown in it. Spend has sort of, you know, 0:06:41.320 --> 0:06:44.719 unduly hammered the stock in our opinion, And when we 0:06:44.760 --> 0:06:48.720 look at Accenture, they've committed to the spending three billion 0:06:48.920 --> 0:06:51.680 to tool up for AI. They were a market leader 0:06:51.720 --> 0:06:54.440 in terms of cloud build significant share when they did 0:06:54.480 --> 0:06:57.240 a large investment like that as well, and we would 0:06:57.279 --> 0:06:59.400 expect them as sort of a picks and shovels type 0:07:00.400 --> 0:07:02.800 company to really benefit in a long term from AI 0:07:03.000 --> 0:07:05.120 as an implementer in that they don't really have to 0:07:05.160 --> 0:07:07.120 pick the winner, they just have to continue to be 0:07:07.240 --> 0:07:08.520 very good at implementing the tech. 0:07:09.720 --> 0:07:11.480 Kevin I didn't expect us to jump straight in on 0:07:11.480 --> 0:07:14.080 an accenture. I'll be honest with you. It's a pretty 0:07:14.120 --> 0:07:17.960 big week economic data, power speaks and everyone has a 0:07:18.000 --> 0:07:21.360 lot of anxiety about in Vidia on August twenty eighth, 0:07:21.400 --> 0:07:23.120 which is the most important for you. 0:07:24.400 --> 0:07:25.280 I mean for us. 0:07:25.800 --> 0:07:28.360 When we look at Nvidia, it's interesting, but we don't 0:07:28.400 --> 0:07:30.920 own in video, and when we think about the market, 0:07:30.960 --> 0:07:33.760 you know, it's been very binary, handful of AI driven 0:07:33.760 --> 0:07:37.480 stocks and really sort of missing sort of the broader 0:07:37.560 --> 0:07:41.720 value creation across the market as a whole. So in 0:07:41.760 --> 0:07:44.440 this case, you know, we certainly acknowledge in VideA. We'll 0:07:44.480 --> 0:07:48.320 understand how it contextually sort of can impact our portfolio. 0:07:48.880 --> 0:07:50.880 What we're sort of keyed in on the short term 0:07:50.960 --> 0:07:53.120 is just sort of continuation of that sort of trend 0:07:53.160 --> 0:07:57.440 and migration from a long term perspective towards AI, but 0:07:57.520 --> 0:08:00.120 also broader tech and seeing how healthy it is in 0:08:00.200 --> 0:08:00.800 terms of growing. 0:08:01.920 --> 0:08:03.600 So that's that's about it. 0:08:03.600 --> 0:08:05.640 It's sort of contextually looking at the short term, but 0:08:06.080 --> 0:08:07.720 really with an eye towards the long term. 0:08:07.800 --> 0:08:10.760 I'm really interested in that that you're not in in video, 0:08:10.840 --> 0:08:15.000 but you are in alphabet, Microsoft TSMC. The likes of 0:08:15.160 --> 0:08:18.520 Eccentia Texas Instruments, maybe less so on the AI side, 0:08:18.600 --> 0:08:20.280 but the others are AI names. 0:08:20.560 --> 0:08:21.760 Why are you in Nvidia? 0:08:22.720 --> 0:08:27.000 So what's interesting about our strategy very inherent in terms 0:08:27.000 --> 0:08:27.360 of us. 0:08:27.400 --> 0:08:29.800 In our sort of quest for. 0:08:29.760 --> 0:08:33.400 Long term quality growth businesses, we look for companies that 0:08:34.000 --> 0:08:36.880 have high returns on capital and consistently, so we're looking 0:08:36.880 --> 0:08:39.839 for companies that have return and excess of fifteen percent 0:08:39.920 --> 0:08:42.280 return on equity for ten years. So it's not an 0:08:42.280 --> 0:08:45.160 average every year as to hit it's supposed to the 0:08:45.200 --> 0:08:48.400 ten years. It is supposed to denote an all sort 0:08:48.440 --> 0:08:52.520 of market type environment of high capital returns. And Nvidia 0:08:52.920 --> 0:08:56.360 had not up until this most recent fiscal year qualified 0:08:57.400 --> 0:08:59.440 and so in that case it does qualify. Now we 0:08:59.480 --> 0:09:03.240 are actually researching it. Our sense when we look at 0:09:03.320 --> 0:09:07.920 the valuation would be that from a fundamental standpoint, we'll 0:09:07.920 --> 0:09:10.239 probably like it. But I think from a valuation standpoint 0:09:10.480 --> 0:09:13.080 for us too rich to sort of enter position. 0:09:14.160 --> 0:09:17.600 Right now, Kevin, The nvidious side of the equation on 0:09:17.679 --> 0:09:21.719 AI is easy to understand. The capex investment on airastructures 0:09:21.760 --> 0:09:24.120 there if you go back to your accenture example, I 0:09:24.120 --> 0:09:27.160 find really interesting where people struggle is to see the 0:09:27.480 --> 0:09:30.240 top line growth coming out the other side, those that 0:09:30.320 --> 0:09:34.920 are working on AI services and products, do you see it. 0:09:34.920 --> 0:09:36.199 It's early days we've seen. 0:09:36.840 --> 0:09:38.280 What's interesting is is you look. 0:09:38.120 --> 0:09:41.640 At the growth in terms of AI projects and spend 0:09:41.960 --> 0:09:47.320 for Accenture has been growing dramatically and so but relative 0:09:47.360 --> 0:09:49.520 to total revenue it's not as large yet. And that's 0:09:49.520 --> 0:09:52.000 typically what we've see in these sort of early adoptions 0:09:52.200 --> 0:09:56.280 of new, newer or new technologies. You sort of see 0:09:56.360 --> 0:10:00.600 small base, large growth, and right now, relative to the picture, 0:10:00.840 --> 0:10:03.280 it looks small. And I think the market, you know, 0:10:03.440 --> 0:10:05.280 from our perspective and we look at it, you know, 0:10:05.320 --> 0:10:08.440 the market's so focused on short term gains that in 0:10:08.559 --> 0:10:10.160 essence sort of looking at the trees, and we're trying 0:10:10.200 --> 0:10:12.640 to look at the forest. And we like the trends, 0:10:12.679 --> 0:10:15.520 we like the direction, and having been invested in this 0:10:15.520 --> 0:10:17.360 company for a long time and seeing this sort of 0:10:17.360 --> 0:10:21.320 play out before in other tech trends, we're incredibly excited 0:10:21.320 --> 0:10:23.240 about the opportunities that had for Accenture. 0:10:24.160 --> 0:10:26.760 Kevin Welcos great to have some time with you. Thank you, 0:10:26.840 --> 0:10:31.199 portfolio manager. Thanks and Jensen making investment management. Now we 0:10:31.280 --> 0:10:34.280 shift gears a little here because Italian divers have now 0:10:34.320 --> 0:10:37.320 been joined by an underwater robot as the search and 0:10:37.360 --> 0:10:39.800 rescue efforts resumed for a third day around the sunken 0:10:39.880 --> 0:10:43.079 yacht off Sicily. A British tech entrepreneur, Mike Lynch will 0:10:43.120 --> 0:10:45.960 we stand the international chairman, Jonathan Bloomer, and four others 0:10:46.360 --> 0:10:49.000 are feared to have died earlier this week. The robot 0:10:49.040 --> 0:10:51.400 is capable of operating on the seabed at a depth 0:10:51.440 --> 0:10:53.560 of up to three hundred meters for between six and 0:10:53.600 --> 0:10:57.240 seven hours as his authorities continue to investigate just how 0:10:57.320 --> 0:10:59.880 the luxury yacht sank in the early hours of Monday morning. 0:11:00.320 --> 0:11:02.040 Will keep you up to date on the latest from 0:11:02.080 --> 0:11:02.640 this tragedy. 0:11:03.320 --> 0:11:05.280 Ed okay coming out. 0:11:05.280 --> 0:11:08.600 Walmart ends its partnership with JD dot Com in China. 0:11:08.679 --> 0:11:13.040 Details on how Walmot's refining its strategy in that country. 0:11:13.080 --> 0:11:15.040 Next, this is Bloomberg Technology. 0:11:25.640 --> 0:11:28.120 Let's return to JD dot Com and the pressure there 0:11:28.160 --> 0:11:31.520 because Walmart actually sold out, raising about three point six 0:11:31.559 --> 0:11:33.720 billion dollars by selling its stake in the Chinese e 0:11:33.720 --> 0:11:36.959 commerce firm, and the move winds down an eight year 0:11:37.040 --> 0:11:40.079 partnership that appears to be paying diminishing returns and pretty 0:11:40.160 --> 0:11:41.959 challenging landscape for Chinese tech giants. 0:11:42.320 --> 0:11:44.560 Bloomberg's Amy Or has more of the details. 0:11:44.960 --> 0:11:48.160 A lot of pressure on the shares of JD dot 0:11:48.160 --> 0:11:51.080 Com for obvious reasons, but it's really sending slight shot 0:11:51.120 --> 0:11:54.240 waves across the entire industry group. People are worried about 0:11:54.240 --> 0:11:56.240 what the signals for JD dot com and its growth. 0:11:56.520 --> 0:12:00.680 Yeah, well, especially at a time when Chinese economy is slowing, 0:12:00.720 --> 0:12:04.400 and also like it's been reflected in e commerce, and 0:12:04.480 --> 0:12:07.760 also it really shows that US companies can actually go 0:12:07.800 --> 0:12:08.400 their own way. 0:12:08.640 --> 0:12:10.280 It's not like eight years ago. 0:12:10.280 --> 0:12:12.920 When the partnership started that you really need a local 0:12:12.960 --> 0:12:17.960 partnership to really gain popularity among Chinese consumers. And now 0:12:18.320 --> 0:12:21.800 Sam's Club has actually got really good recognition amound Chinese 0:12:21.880 --> 0:12:22.760 customers as well. 0:12:24.080 --> 0:12:24.680 This is good point. 0:12:24.720 --> 0:12:25.000 Amy. 0:12:25.200 --> 0:12:27.480 You know, in your reporting you give the backstory of 0:12:27.480 --> 0:12:30.840 Walmart in China, which is about eight years of partnership 0:12:30.840 --> 0:12:34.040 with JD dot Com, but their kind of hypermart business 0:12:34.160 --> 0:12:34.640 is strong. 0:12:34.760 --> 0:12:36.280 Sources talk to us about that. 0:12:36.600 --> 0:12:41.520 What did you learn, So essentially the partnership in the past, 0:12:41.559 --> 0:12:44.680 it was great. It started off as trying to get 0:12:44.760 --> 0:12:49.080 Chinese customers to actually recognize is brands and try to 0:12:49.240 --> 0:12:52.400 gain shares that it might not have been able to 0:12:52.559 --> 0:12:55.400 without a Chinese partner. But now that kind of growth 0:12:55.440 --> 0:12:58.880 has slowed together with the Chinese economy slowing as well. 0:12:59.080 --> 0:13:01.920 And then Sam's Club essentially is the only one of 0:13:02.000 --> 0:13:05.800 the top five e commerce platforms in China that recorded 0:13:05.840 --> 0:13:08.440 growth that really shows that it can actually go alone, 0:13:08.480 --> 0:13:11.160 and it probably should go alone. And essentially the three 0:13:11.200 --> 0:13:14.160 point six billion that it got can actually put to 0:13:14.280 --> 0:13:14.839 better use. 0:13:15.840 --> 0:13:18.360 YEP, that'll help Bloomberg's Amy or who broke the story 0:13:18.440 --> 0:13:21.480 last night, Thank you. Another one that we're watching Ford 0:13:21.600 --> 0:13:26.400 recalibrating its EV strategy again. This time you also makers 0:13:26.440 --> 0:13:29.640 canceling plans for his fully electric suv, a move that 0:13:29.679 --> 0:13:32.840 could cost the company nearly two billion dollars Bloombos. 0:13:32.880 --> 0:13:34.720 Keith Norton is here with more. 0:13:34.880 --> 0:13:37.800 Oh, Keith, it feels just like yesterday that you and 0:13:37.840 --> 0:13:41.679 I were reporting that Ford was going to focus its 0:13:41.720 --> 0:13:44.800 EV units separate away from everything else, and now it's 0:13:44.840 --> 0:13:47.800 a change. I think you spoke to the CEO, Jim Farley, 0:13:48.679 --> 0:13:49.960 what's the rationale here? 0:13:51.280 --> 0:13:51.600 Well? 0:13:51.640 --> 0:13:55.080 And they are trying to find profitability for that EV 0:13:55.280 --> 0:13:58.439 unit that they broke off. Two years ago when we 0:13:58.480 --> 0:14:02.200 reported on that they're expecting that unit known as MODELI 0:14:02.320 --> 0:14:05.200 to lose as much as five point five billion dollars. 0:14:05.679 --> 0:14:08.160 This three row suv that they've canceled. 0:14:08.200 --> 0:14:10.520 They said that Jim Farley told me they just couldn't 0:14:10.559 --> 0:14:13.200 find a way to make it profitable. It requires a 0:14:13.360 --> 0:14:16.920 very large battery, which is high cost, and they can't 0:14:16.920 --> 0:14:18.920 put it out there with all the competition in the 0:14:18.960 --> 0:14:20.880 market requiring price cuts. 0:14:20.560 --> 0:14:22.960 On e these, so they canceled it. 0:14:22.880 --> 0:14:25.960 And they're looking at perhaps doing an extended range electric 0:14:26.040 --> 0:14:27.560 vehicle technology on that. 0:14:28.080 --> 0:14:30.120 Yeah, Jim Vinie actually saying that we loved our three 0:14:30.200 --> 0:14:32.680 road crossover. He was so excited to show it to everyone, 0:14:32.680 --> 0:14:35.120 but they couldn't get it to be profitable. It feels 0:14:35.160 --> 0:14:37.320 as though once again hybrid is where it's at. 0:14:38.480 --> 0:14:41.200 Yes, they're seeing a lot of growth in hybrid, and 0:14:41.680 --> 0:14:46.240 Farley in particular is really enthused by eravs, this extended 0:14:46.320 --> 0:14:48.680 range electric vehicle, which is where you have a gas 0:14:48.720 --> 0:14:52.320 engine that sole purpose is to just recharge the battery. 0:14:52.360 --> 0:14:55.760 It doesn't drive the wheels, so you're really in electric 0:14:55.840 --> 0:14:58.080 mode most of the time. He saw those of her 0:14:58.120 --> 0:15:00.440 in China. He really wants to get them in the 0:15:00.440 --> 0:15:02.920 Ford lineup, and we may see it as that three 0:15:03.080 --> 0:15:04.320 row suv eventually. 0:15:05.560 --> 0:15:07.800 That's something that's popular in China, and a number of 0:15:07.840 --> 0:15:12.400 the Chinese domestic manufacturers have a thought about that. I mean, 0:15:12.400 --> 0:15:17.200 what I don't understand, Keith, is whether this will ever 0:15:17.280 --> 0:15:19.720 be a place where Ford just does evs. I thought 0:15:19.720 --> 0:15:22.760 that that was the transition plan, right, profit from pickups 0:15:23.240 --> 0:15:26.160 funds the transition long term to evs. Now it seems 0:15:26.200 --> 0:15:29.920 like that's not as clear cut, right it. 0:15:29.960 --> 0:15:33.560 Is not ed, and the new plan really is leans 0:15:33.600 --> 0:15:36.360 on hybrids more, which Ford has been in the business 0:15:36.360 --> 0:15:39.880 of doing for a long time. In the EV space. 0:15:40.000 --> 0:15:43.640 They're looking to do smaller evs and they're really looking 0:15:43.680 --> 0:15:48.680 at advances in battery technology. They have LFP batteries coming 0:15:48.680 --> 0:15:52.040 out of plant in Michigan that will power a new 0:15:52.280 --> 0:15:54.000 medium size pickup truck. 0:15:54.320 --> 0:15:56.600 Ed pickup truck will have in twenty twenty seven. 0:15:57.240 --> 0:15:59.960 Jim Farley told me that the total cost of owner 0:16:00.360 --> 0:16:03.640 of that truck with those lower cost batteries will actually 0:16:03.680 --> 0:16:05.640 be cheaper than traditional vehicles. 0:16:06.520 --> 0:16:10.520 He called us a tremendous pivot. Is this an embarrassment, Keith? 0:16:10.720 --> 0:16:15.640 Is this something that Jim's worried about investor reactions one Tim. 0:16:15.440 --> 0:16:18.760 Well, so far investors have reacted positively. The stock is 0:16:18.840 --> 0:16:19.560 up today. 0:16:20.080 --> 0:16:22.359 I guess there's a couple of ways to look at it. 0:16:22.360 --> 0:16:25.400 It's certainly embarrassing that everyone got so caught up in 0:16:25.440 --> 0:16:28.840 the hype that they started building plants and building battery 0:16:28.880 --> 0:16:31.680 factories everywhere and now have to scale back. 0:16:31.960 --> 0:16:34.640 But for it at least has acknowledge the need to 0:16:34.680 --> 0:16:35.120 do that. 0:16:35.240 --> 0:16:38.280 They've been sort of out front saying no, we need 0:16:38.320 --> 0:16:41.040 to change, and they've been sort of chipping away at it, 0:16:41.080 --> 0:16:43.840 and now they've done this whole plan that he says 0:16:44.320 --> 0:16:46.880 he thinks will be the final move. 0:16:47.040 --> 0:16:47.800 We'll see. 0:16:48.400 --> 0:16:50.160 It's a big cost to have to sucker once again, 0:16:50.240 --> 0:16:52.680 Keith Norton quite importing me. Thank you so much for 0:16:52.760 --> 0:16:53.360 joining us on. 0:16:53.320 --> 0:17:04.520 It time for AI in Action, and today we're looking 0:17:04.560 --> 0:17:07.640 at the rising risks of AI in cybersecurity and how 0:17:07.640 --> 0:17:11.119 one company aims to fight fire with fire in combating 0:17:11.119 --> 0:17:14.560 the threats. Joining us now is Evan Reiser, Abnormal Security CEO. 0:17:15.000 --> 0:17:17.440 A Normal recently hit a five point one billion dollar 0:17:17.560 --> 0:17:20.800 valuation and it's latest Series D fundraise, and I think 0:17:20.840 --> 0:17:23.959 that the story here is actually pretty clear that the 0:17:24.000 --> 0:17:28.280 tools available to your industry in defense are also available 0:17:28.320 --> 0:17:31.040 to the threat actors. Right that AI has given them 0:17:31.480 --> 0:17:33.880 something to work with, and that's kind of what you're 0:17:33.880 --> 0:17:34.520 trying to combat. 0:17:34.520 --> 0:17:38.320 Evan, That's absolutely right. You know, AI is an extremely 0:17:38.359 --> 0:17:41.040 powerful technology. Like all technology, it's a tool, and tool 0:17:41.040 --> 0:17:43.679 could be used for good or evil. Unfortunately, you know, 0:17:43.760 --> 0:17:46.840 criminals are faster adopting technology, and they're using new AI 0:17:46.920 --> 0:17:49.680 technologies to do more bad things. 0:17:50.320 --> 0:17:54.000 You've got twenty four hundred plus customers. How are they 0:17:54.119 --> 0:17:54.439 using you? 0:17:54.560 --> 0:17:58.400 Because ultimately you're trying to predict me, the human and 0:17:58.480 --> 0:18:01.560 when I start to act in a strange way, right. 0:18:02.200 --> 0:18:04.800 Yeah, in an abnormal way. So that that's correct. 0:18:04.800 --> 0:18:06.840 So you know, if you look, you know, decade ago, 0:18:07.160 --> 0:18:10.200 criminals are very focused on attach infrastructure. Now they've moved 0:18:10.200 --> 0:18:12.359 on to the more vulnerable target, which is people, and 0:18:12.640 --> 0:18:15.320 we see you know, social enduring, fraud, fishing, those are 0:18:15.359 --> 0:18:17.920 the biggest forms of cyber attacks, number one cause of breaches. 0:18:18.600 --> 0:18:21.960 Just like you said, abnormals focused on understanding human behavior, 0:18:22.000 --> 0:18:23.879 you know, better than humans, so we can protect humans. 0:18:26.040 --> 0:18:30.040 What I understand Evan is you've got a really impressive 0:18:30.040 --> 0:18:33.600 annual revenue run rate two hundred million dollars. Right, Why 0:18:33.680 --> 0:18:35.840 is it such a vacuum for you to jump into? 0:18:36.400 --> 0:18:38.760 It seems like we've been talking about the AI story 0:18:38.800 --> 0:18:40.920 for a few years, let's say two or three years, 0:18:41.280 --> 0:18:43.400 and now everyone's like, Okay, I need to think about 0:18:43.400 --> 0:18:44.280 the threat before me. 0:18:44.560 --> 0:18:45.800 Why not do it earlier? 0:18:47.040 --> 0:18:47.240 Yeah? 0:18:47.320 --> 0:18:49.560 I think there's two reasons. One is that with the 0:18:49.640 --> 0:18:52.440 rise of these new technologies, it's very easy and accessible 0:18:52.480 --> 0:18:56.200 for criminals to you know, supercharge their attacks. We've seen 0:18:56.200 --> 0:18:58.560 this rise of social enduring and fishing over the last 0:18:58.600 --> 0:19:02.240 couple of years. As Ano there's still the number one cybercrime, 0:19:02.760 --> 0:19:05.320 but now any petty criminal can use chat GBT. They 0:19:05.320 --> 0:19:08.399 can send emails in perfect English, with perfect grammar, with 0:19:08.480 --> 0:19:12.200 context about their victims. And these new technologies allow criminals 0:19:12.280 --> 0:19:14.879 to personalize at scale, and that is very hard to 0:19:14.880 --> 0:19:17.400 defend against. The reason it's really hard is that conventional 0:19:17.400 --> 0:19:19.960 cybersecurits focus on threat intelligence, kind of studying all the 0:19:20.000 --> 0:19:23.520 known bad attacks blocking the existing attacks. And so this 0:19:23.560 --> 0:19:25.800